Thursday, January 19, 2017

“Sidestepping the Military Leviathan: Make Money, Not War”

"Mock-up of planned Russian-Chinese airliner to compete with Boeing and Airbus. To enter service by 2025. Ambitious? Oh yes. Remember when we laughed at Toyota, Airbus, and Trump?

Is Washington really going to start a trade war with China, or is it just huffing and puffing for position? I don’t know. Mr. Trump has inexplicably failed to brief me. A point worth bearing in mind: The United States cannot compete commercially with a developed Asia, or China.

America has nowhere to go. It is a fully developed economy that cannot grow rapidly if it grows at all. America is also a country of only medium size with a white and Asian population of a bit more than two hundred million who do all the brain work. It has a decaying system of education, declining living standards, and an economy crippled by huge military expenditures. By contrast China has a billion Han Chinese, intelligent government, a great deal of room to grow and high rates of doing so. The combined land mass, population, and economic potential of Asia are staggering. In differing degrees, Asian nations are growing.

Further, Eurasia is one continent, and China has land connections to all of it–“interior lines of communication,” as soldiers say. America does not. Beijing’s stated intention is to use this to unite Eurasia into one enormous commercial unit—which will not include guess who. Beijing can do this. It has the cash. China is the world’s leader in high-speed rail. As a competent dictatorship, it can decide to do things and then do them, while America often seems unable to do either.

Some time has passed since Beijing made its first rail shipment from Wuli on the Pacific coast through Kazakhstan, Russia, Beloruss, Poland, to Germany and then left to Madrid. It was clunky and a bit of a stunt. Now there are scheduled trains connecting many Chinese cities to the rest of Asia, including Europe. This will not rival sea transport in volume, but will give a lot of places in Asia access to each other. Influence will follow. Watch.

Click image for larger size.

This is bad news for Washington. Greater trade between Europe and the eastern part of the continent means less influence for Washington. It means potentially very much less influence. European nations have much to gain by trading with the incomprehensibly large markets, current and arriving, between Poland the the Pacific. They have nothing to gain by remaining as sepoy states under American control. Their businessmen know it.

China, already the world leader in supercomputers both in number and performance, hopes to have an exascale machine by 2018, way ahead of the US. These are not people to underestimate.

This dismal reality looks to be behind the orchestrated billingsgate against Russia, the war drums being pounded about the South China Sea, and the obvious desire for war with Iran. These three counties are key to an economic union that, if not stopped, will dwarf the United States. While some hope that China will collapse because of internal problems, this is a thin reed upon which to bet the Empire. Washington knows it.

The Empire can not afford to lose control of Europe’s governments, which will happen if heavy trade is allowed to develop with the Three Bugbears. Thus Washington’s hostility to all three—a hostility whose chief effect, note, has been to drive them together against America. Not good. The first rule of empires is Don’t let your enemies unite.

Here we come to a crucial difference between American and Chinese foreign policy. Washington’s approach to maintaining the Empire has consisted of military attack, threats of military attack, military occupation, and the imposition of sanctions. These are visibly declining in effectiveness. The US currently has sanctions against North Korea, Cuba, Iran, and Russia—none of which has produced the desired capitulation. Unless Washington comes up with something quick, presumably a shooting war or a trade war, its aircraft carriers will steam in circles, slowly rusting, while Asia grows.

Glimmerings of rebellion appear in many places. In the Philippines, Duterte is snuggling up to China. While Washington may kill him or twist his arm, twenty years ago this would not have been necessary. Malaya recently bought Chinese naval vessels. Thailand has begun buying Chinese arms. Countries are slowly abandoning the dollar. German businessmen want to trade with Russia.

Trump now proposes sanctions on China, having said the he would impose a tariff of forty-five percent on goods from there. Perhaps he was lying, bluffing, or posing in the standard manner of politicians. Maybe he wasn’t. I am not so foolish as to think I can predict the course of a trade war, but neither am I so foolish as to believe that Trump can.

He seems to have the instincts of a bully, which works, or may work, with weak states like Mexico. China isn’t one. He has said that China needs the US more than the US needs China, and so China will surrender. This was also said of Cuba, North Korea, Iran, and Russia. The US remains superior to China in all sorts of things, but a lot fewer than before. A trade war won might prove less desirable than a trade war not started. We remember Pyrrhus for a reason.

If only for reasons of vanity, Trump couldn’t let China get away with calling his bluff. Millions have died over wounded vanity. What could he do? Go for an all-out trade war? Again, risky. Proud countries dig their heels in. China is not without options. By simply turning to Airbus as exclusive provider to its large and growing market, it would wreak havoc on Boeing and its work force and perhaps marginalize the company. Add that Israel may not allow Boeing to sell to Iran, which would be a further blow.

It is interesting to consider recent PISA scores, which measure the academic performance of school kids. Math scores in order by country: Singapore, Hongkong, Macao, Taiwan, Japan, China. The US was well below average for the countries tested, though its scores are lowered by minorities. Headline: “NY Professor Says Algebra Is Too Hard, Schools Should Drop It.” On fairness, America leads in safe spaces, trigger warnings, puzzled diversity, and whimpering Snowflakes. Watch out, Beijing.

A trade war might come down to whose population can better tolerate want. The deplorables who shop at Walmart are already stretched pretty tight and would not react well to being further impoverished for what they would see as profits for the Establishment.

If I may briefly reveal my commie tendencies, maybe America ought to worry about its universities, roads, laboratories, and medical care instead of wasting its money on corruption, bombers, lunges for empire, and dreams that 1955 is just around the corner.”

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